Capricorn Society Ltd launches share offer

Capricorn Society Ltd, the centralised buying arm of the automotive repair industry, has taken the final step in its transition from a co-operative to a public company by offering shares to its members.

It has lodged an offer information statement with the Australian Securities and Investments Commission, which will allow Capricorn to sign up new members for the first time since February last year.

The offer information statement also disclosed that Capricorn has achieved further growth in sales and profits.

Its 10,800 members in Australia, New Zealand and South Africa bought $639 million of automotive parts and accessories through Capricorn in the year to December 2006.

That was up from $611 million in the year to June 2006 and $541 million in the year to June 2005, continuing the group’s uninterrupted growth over the past 20 years.

Chief executive Trent Bartlett said automotive service businesses needed to be members of the company in order to gain access to its services.

It was intended that new members would buy $500 worth of shares.

Existing members could reinvest dividends and rebates in additional shares, up to a ceiling of 75,000 $1 shares.

Mr Bartlett said the share offer, which could raise up to $4.9 million, was not designed to raise money for any specific purpose.

The company already has cash assets of $23.8 million and will use the proceeds for working capital.

The financial accounts disclosed that, as well as lifting sales revenue, Capricorn enjoyed a big increase in other income, which jumped by 36 per cent to $6.6 million.

This included unrealised gains on investments.

The higher revenue flowed through to the bottom line, with net profit increasing to $6.7 million from $0.5 million previously.

“We will return the majority, if not all of the profit, back to our members in dividends and rebates,” Mr Bartlett said.

Capricorn was established as a cooperative in 1975 to help automotive repair and service businesses buy parts at competitive prices.

It converted to a public company last August, mainly for corporate governance reasons and to facilitate an expansion of its financial services activities.

The current share offer will remain open until June 25 2008 or an earlier date that is determined by the company, and will be replaced on a rolling basis by a new share offer so that automotive business are able to become members.